Besides some of its shortcomings (such as the occasional slow syncing), the iDisk is arguably one of the coolest features of .Mac. Yes, there is a great selection of services out there that offer more space for free, but the iDisk's unique ability to (now this is the clincher) automatically sync in the background as opposed to clunky file upload dialogs - with no user interaction needed - is where it truly shines. It's an automated file syncing and backup system that I believe could stand on its own easily for anywhere from $30/year to maybe even $50 (though at $50, I too would echo the requests for a tad more space). This feature is also a source of criticism from power users, however, who are quick to point out that they can build a 200GB syncing WebDAV disk with their own hosting for $0.15/decade. The thing we all have to remember is: the iDisk isn't exactly aimed at the 1337 h4x0r amongst us. I have my own hosting at DreamHost and I've used a WebDAV drive too - there's just a few key ways the iDisk shines above the rest, and those features can be key to many of us, 1337 or otherwise.
One of the other killer .Mac features of which there are few competitors (aside from examples like Plaxo for contacts) is application syncing. This is made even cooler with 10.4 Tiger because of the open Syncing Services platform for third parties, so everything from Yojimbo to Transmit and more can get in on the fun. I frequently see this feature alone cited by everyone from John Doe bloggers to developers themselves as the *one* reason they hang on to their .Mac account - so why not spin it off and potentially beef it up? I bet Apple could snag at least $30/year for this service alone, and after splitting .Mac up (and marketing the heck out of the new darling), I'm sure the .Mac service and its support from 3rd parties would receive their own significant boosts from users and the developer community, causing both the iDisk and Application Syncing to gain extra value.
Hosting and email
These features probably ride backseat to the two I've already mentioned, primarily because hosting and email are so easy and cheap to come by these days. I also bundled these two since that's more or less the standard now. But Dave Caolo already touched on how .Mac could really shine here - by offering killer website building features both online and offline. iWeb 1.0 was a nice effort, but by giving 2.0 a big upgrade at Macworld 07 and infusing Homepage with some real web 2.0 power, Apple could finally have a chance of at least stacking up alongside the free competition.
The other half of this optional .Mac service is webmail, set to receive a promising refresh which could help boost their reputation and draw as a web services leader. After all, how much does it suck to send someone to such an ugly URL as http://something.googlepages.com/? By contrast, mac.com/steve is clean, short and simple (of course, this would require the .Mac team to remove the silly 'web' prefix of .Mac URLs - hint hint), while an @mac.com address admittedly comes with a coolness factor of its own.
All of this web functionality already comes with well-integrated desktop tools, and if storage space would rise to meet the respectable 10GB/month bandwidth limit for regular accounts, I'm betting Apple could snag another $30-50 for this bundled service.
Putting it all together
There you have it - my simple plan that could allow Apple to offer their 'take it all or leave it' .Mac service in profitable (hopefully) and bite-sized portions for users with specific needs. On the low end my pricing means .Mac would cost $90 (hey, a price drop couldn't hurt), but on the high end Apple could still sell their all-in-one bundled package, claiming it's a 'more than $X value!' for their nice round $99.
Now if you'll excuse me, I'm going to go wait for my call from Apple's business strategies department while you get your coffee talk on.